The decision made by Israeli authorities to push forward a plan for 2,610 new settler housing units in annexed east Jerusalem will “poison the atmosphere” and call into question Israel’s true commitment to peace, the U.S. State Department and White House said Wednesday.

Hours before Israeli Prime Minister Benjamin Netanyahu was due to meet with U.S. President Barack Obama in Washington, the Israeli nonprofit organization Peace Now published a statement condemning Israeli construction plans in the Givat Hamatos settlement in east Jerusalem.

The plan, which was formally approved last week, “is destructive to the two states solution. Like the E1 plan, it divides the potential Palestinian state and blocks the possibility to connect the Palestinian neighborhoods in south Jerusalem with the future Palestinian sate,” a statement by Peace Now reads. “Netanyahu continues his policy to destroy the possibility of a two state solution. He is doing so in the West Bank, and he is doing so in East Jerusalem.”

Hagit Ofran, spokeswoman for Peace Now, told AFP on Wednesday that the timing of the approval was political, but the exact reason was unclear.

At a White House meeting between the two heads of state on Wednesday, Obama raised with Netanyahu what a spokesman referred to as the “troubling” development of the new homes.

“This development will only draw condemnation from the international community, distance Israel from even its closest allies, poison the atmosphere not only with the Palestinians but also with the very Arab governments with which Prime Minister Netanyahu said he wanted to build relations,” U.S. State Department Jen Psaki said during a briefing on Wednesday.

The move to expand settler housing in east Jerusalem, added Psaki, would “call into question Israel’s ultimate commitment to a peaceful negotiated settlement.”

Hanan Ashrawi, a leader of the PLO, criticized the Givat Hamatos plan, arguing the Israeli government was apparently more interested in “stealing land than making peace.”

Israel’s continued settlement construction and expansion in annexed east Jerusalem and the occupied West Bank, exploits deemed illegal under international law, has caused the collapse of several rounds of peace negotiations.

Currently, nearly 306,000 Palestinians share east Jerusalem neighborhoods with more than 200,000 settlers, according to the Jerusalem municipality.